“We are pleased with our solid third quarter financial performance,
which included delivering strong revenue growth and double-digit growth
in net income,” said Ron Nersesian, Keysight president and CEO. “While
we continue to see market headwinds, which were further compounded by
economic concerns in Europe this quarter, customers are accelerating
investment in next-generation technologies. With the targeted
investments we are making to develop innovative solutions and transform
Keysight for growth, we are starting to build momentum in the market and
are well positioned as the market for these next-generation technologies
continues to evolve.”

Third Quarter Financial Summary

Total GAAP revenue grew 7 percent year-over-year to $715 million,
compared with $665 million in the third quarter of 2015.

Total non-GAAP revenue grew 8 percent year-over-year to $718 million,
compared with $665 million in the third quarter of 2015. Non-GAAP core
revenue, which excludes revenue from acquisitions and the impact of
currency, grew 2 percent year-over-year.

GAAP operating margin was 15 percent, compared with 15 percent in the
third quarter of 2015.

Non-GAAP operating margin was 20 percent, compared with 19 percent in
the third quarter of 2015.

GAAP net income was $91 million, or $0.53 per share, compared with net
income of $70 million, or $0.41 per share, in the third quarter of
2015.

Non-GAAP net income was $108 million, or $0.63 per share, compared
with $94 million, or $0.55 per share, in the third quarter of 2015.

As of July 31, 2016, cash and cash equivalents totaled $664 million.

Reconciliations between GAAP and non-GAAP information are contained in
the attached tables and discussed in the section titled "Non-GAAP
Measures".

As previously announced, Keysight has changed its reporting segments in
order to align the company’s reporting segments with its new management
reporting structure, which is based on the company’s end markets and
provides increased visibility into end market performance. Additional
information regarding Keysight’s new reporting segments and prior period
results are available on the company’s website at
investor.keysight.com.

Communications Solutions Group (CSG)

CSG revenue grew 9 percent year-over-year to $424 million,
compared with $389 million in the third quarter of 2015. CSG
revenue was driven by the addition of revenue from the acquisition
of Anite, growth in aerospace defense and government and increased
sales of 5G next-generation solutions. This growth was tempered by
on-going headwinds in the wireless supply chain and softness in
Europe.

CSG operating margin was 18 percent, compared with 18 percent in
the third quarter of 2015.

Electronic Industrial Solutions Group (EISG)

EISG revenue grew 9 percent year-over-year to $191 million,
compared with $175 million in the third quarter of 2015. EISG
revenue was driven by strong sales for our parametric
semiconductor measurement solutions, partially offset by softness
in Europe.

EISG operating margin was 23 percent, compared with 19 percent in
the third quarter of 2015.

Services Solutions Group (SSG)

SSG revenue grew 2 percent year-over-year to $103 million,
compared with $101 million in the third quarter of 2015. SSG
revenue was driven by growth in multi-vendor calibration services
and an increase in used equipment sales.

SSG operating margin was 19 percent, compared with 19 percent in
the third quarter of 2015.